'Not Dacoity': SC Slams Massive Medicine Price Markups
The Supreme Court questions the Centre over massive gaps between medicine retail and procurement prices, warning hospitals cannot survive via dacoity.
The Supreme Court of India has launched a scathing critique of the central government and private healthcare institutions over the staggering disparity between the procurement cost of medicines and their Maximum Retail Price (MRP). During a hearing on Tuesday, a bench comprising Justices Vikram Nath and Sandeep Mehta questioned why the current system seems designed to benefit pharmaceutical manufacturers at the expense of suffering patients.
'Totally Defunct' Regulatory Body
The court expressed deep frustration with the National Pharmaceutical Pricing Authority (NPPA), describing the regulatory body as appearing "totally defunct." The bench questioned the government's reluctance to implement more extensive regulations on medicine pricing, asking pointedly, "Why is the entire system working to help these people (manufacturers)?"
The hearing focused on two petitions highlighting the lack of price controls for non-scheduled medicines and medical devices. Petitioner Kishan Chand Jain pointed out a critical loophole: approximately 82 per cent of medicines fall outside the "scheduled category" under the Drug Price Control Order (DPCO), 2013. This allows manufacturers immense flexibility in fixing MRPs without being subject to upfront price ceilings.
Commerce vs. Compassion
When Additional Solicitor General Aishwarya Bhati argued that India maintains some of the lowest medicine prices globally, the court rejected the comparison. Justice Mehta remarked that affordability cannot be measured in a vacuum without considering India's low per capita income, sternly advising the government: "Don’t weigh patients against commerce."
The bench highlighted several alarming examples of price hikes and disparities:
- Extreme Markups: The court cited a drip line that retailers procure for Rs 15 but sell to patients for Rs 250.
- Unjustified Hikes: The bench questioned how a price jump from Rs 11,000 to Rs 1.3 lakh could be logically justified as "calibration."
- Cancer Drugs: The court questioned the long delay in capping profit margins for critical cancer medications.
Hospitals Under Fire
The court's ire extended to private hospitals that charge exorbitant markups on medicines. Senior advocate Mukul Rohatgi, representing the hospitals, argued that these institutions maintain 24/7 infrastructure and cannot ask patients to buy medicines from external pharmacies due to the risk of spurious drugs and high operational costs.
The bench dismissed these justifications, stating that while hospitals are commercial entities that charge for various services, they cannot justify quoting medicines at 100 or 200 times their cost. In a sharp observation, the court stated that hospitals could not sustain their operations through "dacoity."
Unanswered Questions
The court also noted that the government had failed to explain the role of corporate discounts offered by manufacturers in the pricing structure. The bench warned that medicine pricing cannot be allowed to "run amok" and insisted that the government cannot treat this as a mere matter of economic policy when lives are at stake.
The Supreme Court has reserved its order on the plea, which seeks mandatory generic prescriptions, regulation of initial prices for non-scheduled medicines, and strict price caps on medical devices.